President Arroyo is hesitant to sign the proposed "Expanded Senior Citizens Act” recently passed by Congress, Malacañang said Thursday, out of fear the law could dampen collection of the value added tax and complicate the system of its collection.

Deputy presidential spokesperson Gary Olivar, an economist like Mrs. Arroyo, said the administration will weigh the pros and cons of the proposed measure, which seeks to exempt the elderly from the 12 percent VAT.

The exemption would enable the elderly to fully avail of the 20 percent senior citizens’ discounts as provided for under the Senior Citizens Act or Republic Act 7342.

Olivar said Mrs. Arroyo will consider national interest in her decision whether or not to ink the bill, which is now in the hands of the Executive for scrutiny.

“Veto is always an option. She will have to exercise her discretion and good judgment,” the Palace official said.

He said the administration’s reservation on the bill does not signify that it is opposing the bill, which seeks to promote the welfare of senior citizens 60 years old and above.

“Syempre yung pag-alaga nating ng matatanda, ‘di po natin kinokontra o tinatawaran yun. Titimbangin ng Pangulo kung alin ang mas mabigat para sa national interest, ‘yung kapakanan ng elderly, or yung epekto sa deficit o revenues. Titimbangin pa niya,” he said.

Olivar expressed concern over the negative effects of the proposed measure n the economy, saying it would slash the VAT collection and would complicate the administration of the VAT system.

“On one hand, sabi ng critics kailangan maging mas efficient collection natin para mabawasan ang deficit. On the other hand, may itinutulak na ganitong panukala na magiging mas complicated ang collection ng VAT at ‘di ito makakatulong sa pagpapalaki ng taxes,” he said.

Apart from the VAT exemption, the measure would also provide free vaccination against influenza virus pneumococcal disease for indigent senior citizen patients, and a death benefit assistance of P2,000.

A monthly stipend amounting to P1,500 for indigent senior citizens will also be provided under the bill, which also mandates the creation of a senior citizens’ ward in all government hospitals and the coverage of indigent seniors by the National Health Insurance Program or Philhealth.